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2013 (10) TMI 1029 - HC - Income TaxWhether amount advanced to a contractor for execution of work for the purpose of business becomes irrecoverable, the same is not allowable as bad debt – Held that:- Assessee is an ice cream manufacturing concern. On February 3, 1996, the assessee concern placed an order with M/s. Alps Engineering Services Pvt. Ltd., for construction of a cold storage plant at its factory at Coimbatore and advanced a sum of Rs. 7,89,500. The said Alps Engineering Services Pvt. Ltd., did not commence the work due to their financial strain. A sum of Rs.2 lakhs was recovered from the advance already paid and the balance was claimed as deduction from the total income under the heading "Business loss", as the amount was not recovered – Reliance has been placed upon the judgment in the case of Hasimara Industries Ltd. v. CIT [1998 (5) TMI 7 - SUPREME Court], wherein it was held that if the assessee sustains business loss during the enlargement of the business, the same should be treated as capital investment – Decided against the Assessee.
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